Monday, January 12, 2015

Last week I was discussing CFO of one of the listed companies about their board vacancy and new members on the board. He informed me that they have inducted two chartered accountants (CA). One CA was already there on their board. I wondered how many CAs a company needs on their board? Company board indicates diversity and inattentiveness of the company.

In most Indian companies we will find CA and lawyers as independent directors. I fail to understand compliance is the only role of the board? Do executive directors not want views from professionals from various fields?

Marketing, HR, Economists, Architects, and why not writers ad artists, for out of the box views , social media expert, IT professionals , film directors , media & communication professionals, international and local domain experts I mean there are many diverse professionals available who can add perhaps more value that legal and finance professionals.

But most companies do not want to think differently. Independent directors should play active role in growth and strategy of the company which is much more than compliance and tax planning or linear thinking. there is noting wrong with CA and lawyers on board but excessive of them wont work.

In light of above today's interview of SBI Chairperson Mrs Bhattacharya is welcome that PSU boards have surfeit of CAs. I think this should be a thinking point for all boards to review critically excessive of anything. Company board need diversity in times we live in. Markets outside is dynamic and need lateral thinking. When war is of talent , limited and lopsided boards will make companies struggle to survive.

Friday, August 29, 2014

We CAs are a unique tribe. We are pampered during our article ship, before we actually deserve; statutory authorities have given us immense social respect by bestowing some great responsibilities , before we have earned that (degree is minimum qualifier not earned respect), we wear this hat of CA in our day to day social life and act as an auditor of everything including life. Finding fault with everything has become our birth right or we assume it is our life mission.

There are some great CAs, doing fabulous social work and contributing their might positively by becoming part of the solution, baring those , most of CAs can be classified in two categories;

They are either inactive/indifferent in social contribution or fault finders, part of the problem wherever they go and whatever they see. Audit & tax are not only their bread and butter but their water and air too. They do not have third angle to anything.

CAs are often compared to MBAs and earlier with lawyers. Well, both these tribes are not comparable to us. Compared to number of lawyers seen in politics, CAs is not a match. We don’t take active interest in world around us. Politics is about taking charge & doing something - proactively. It’s about communication, communication at its best. We lack adequate skills here.

MBAs are obvious different – they are trained in classroom, their trainers come from different walks of life, they have campus culture of networking and team work, they have holistic view of the business, they have great public communication skills in public. – We lose here on competitive skills.

Lest we forget both - lawyers and MBAs have subject knowledge too. It’s not only about communication skills but its depth of subject plus communication skills and most important their interest in things around them, eagerness to contribute positively sets them distinctly apart from CAs.

It takes all the three attributes shown above for a CAs to become all round socially relevant human being. Hat of CA is a proud hat to wear but forgetting to remove while living life will keep us CAs only and not a complete living human being.

I live in a housing complex where there are 400+ flats and around 2500 population. It comprises of 4 housing societies and as many as 40 CAs in the complex. Most of them are not willing to join managing committees. If forced to join seldom attend the meeting. Even if they attend the meeting many of them play a destructive role of just opposing everything. Instead of becoming a facilitator of good work and helping those who are working with their help either time or money or contacts, these people play negative role , become road blocks and frustrate those who are working and willing to work.

Out of the total 40 managing committee members from 4 societies & 40 odd CAs, there are hardly any CAs are the part of managing committees. I being in touch with all the 4 societies as a chairman of the common association I get feedback from other managing committee members that these CAs are just playing a role of a compliance officer. They are extremely focused on compliance, minutes, methods and legality & other petty issues irrespective whether it’s stalling the work and killing the spirit of cooperation.

They do not see life beyond that. As a managing committee following the law is important but it’s insignificant area as compared to larger role it has to play in the overall development and maintenance of the society.

This brings to my moot question. Are we just a CA in our personal life? Why CA even though a powerful degree can’t stand competition with MBAs? Why for CEO engineers and MBAs are preferred than CAs? We all are individual plus CA. However once we get the CA degree we just remain CA and shed our individuality.

I recollect what CA YM Kale after joining Hinduja Group said in one of the conferences “ We CAs think we are most important & indispensable part of the businesses however once you join industry and assume larger role one can realize how insignificant is the role of a CA in the larger overall perspective of the business landscape.”

When the world is sleeping we have to remain awake is our slogan, agreed. However that should not become a barrier for us to assume larger role in life. CAs must assume role of problem solver , facilitator of good work in society around them and get out of the audit hat unless actually auditing. Life is much more than mere auditing and tax!!

Friday, December 23, 2011

Yes, when I help them in capital structuring , interest cost does down

When I help them to take make or buy decision, it impacts investments in fixed assets which in turn affects investment requirements, depreciation , interest cost and Mfg Cost

When I help them lean manufacturing and operations, wastage is reduced

When I help them in process rejuvenation , it reduces wastes and quicken the business

When I help them in offering WOW !! Customer Experience, they get more sales ,

premium pricing & powerful branding

When I help them on Social Media Strategy, it reduces sales & marketing cost and increases referral sales

All these initiatives will add to PROFIT and therefore it impacts Direct Tax , add to enterprise's Tax burden.

As a CA I started as a tax practitioner and focused on below the line tax consultancy & helped enterprises in reducing their tax burden, now I am focused on above the line advisory and helping indirectly to the Govt in filling their tax kitty. Govt & Entrepreneurs both are happy along with me.